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tv   [untitled]    August 16, 2013 7:00am-7:31am PDT

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unlike the private sector, there are so many places that have impacts. if you add to that that a tenant might want to make tenant improvements, they're not usually knowledgeable of their requirements for historic preservation. so, there is a negotiation around, if you will, moving their vision into something that was acceptable for historic preservation. sometimes they want to have a person per square foot that triggers a requirement for a new bathroom or some other thing that we don't have in our old warehouses and that has to be built out and there is a negotiation around who will pay for that. sometimes there are [speaker not understood]. it starts out as photo storage and turns into a museum. so, everything happens. there isn't any one thing i can point to, but if you realery seeking a way to streamline them, maybe what we should look
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at is what the delegated authorities are for negotiating more broadly around terms in the [speaker not understood]. >> i'd like to do that. if it's on the lease side, if i'm applying for a lease to the port and you guys want a pink piece of paper, it's up to me to get it and get it quick. [speaker not understood]. i don't know, maybe it's -- i'd certainly agree we should take a look at that. >> okay, be happy to. what would really be helpful to the real estate staff is often folks that eventually get to your ears are folks that are having a problem or they're not getting what they want. but if you feel free to call me and we can walk through it and investigate what the hurdles are, or their perceived hurdles.
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sometimes it's just a natural progression that it takes time to do things. or maybe they're being asked to do something that they don't really want to do. so, it would be helpful if you would call me or the leasing manager or any of the property managers and, you know, ask -- that would be helpful to us if we can learn what the perception is out on the street, if it's different from what we're perceiving. >> the perception out on the street is people on the street don't know what's available at the port for rent, first of all. and i don't think it's advertised probably well enough is one issue.
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[speaker not understood] perception i got long before i became a commissioner, not something yesterday or the day before. i'm hearing because i'm the commissioner. it's that i've heard it for many years. so, and i don't necessarily like to hear it. i'm just trying to come up with -- understand you guys come up with some ways to improve it. >> over the years i think we have. we strive, we continually look at our process. we continually make changes. so, we're here for you to guide us and help us with that process. and we have committed to look at our website and how we put our vacancies on our website. it works for us, but it might not work for the general public. so, we're going to look at that. and make some changes to that process. ~ >> we certainly as commissioners don't want to be,
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as i said, down in the weeds all the time. i know often as commissioners, we ask a question about something, then we get a pile of paper this high that will take us a week to read it. and we don't have that kind of time. so, that's why i'm asking the questions today. but thank you anyway. >> sure. >> commissioner adams. >> first of all -- first of all, susan, i like your comments. commissioner murphy, he's a real estate expert, i'm not. but i've just got a few things i'd like to add. it's clear to see the vacancy rate is 8% compared to 9.5 city-wide. it seems like we're doing pretty good. then when i look at the revenues from 2009 to 2013, we've only -- i mean, to me one to one, 2 and 2 is 4.
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i look at a syncratic approach. [speaker not understood]. i haven't heard anything in the streets saying there is a difficult process to come back to the port. i'm pretty much out in the streets. that's good. one commissioner can hear one thing -- that's why we have five commissioners, so, we all have different points of view which i think makes it good. if there was something that you thought we could improve on, what would that be? >> it ~ the things that we have control over, i think we have made an effort all the way down from monique to the staff that are actually doing it. i think where our big hurdle is, is regulatory issues, city ordinance issues. those are probably the biggest stumbling blocks and unfortunately sometimes a good
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intention becomes a hurdle. so, for example, the bidding process, everything needs to be publicly bid and you all know what that process is. it is a long process. but sometimes it needs to be a long process to ensure that nobody or nothing is getting left out. because when you do things quickly, sometimes you make mistakes. so, i think that what we can do is to continually look at our process and continue to improve it as we find things. you know, we've been doing the same thing for a long time. it's comfortable and it's hard to change. everybody has trouble with change. so, to listen to each other and for you to work with us and for us to work with you in improving whatever what we hear, what's difficult, and just make sure that we get the
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opportunities that are on the port out there for everybody to participate in. >> okay. like i say, i'd like to see you work closely with commissioner murphy. he might have some insider things that i wouldn't have or some things that he may think because that's what he does. he comes from that kind of a background. >> well, i have a table and a bunch of chairs in my office that you're welcome to come and use any time. >> we do have public comment. jeff sears. good afternoon, director moyers, commissioners. really glad to be here today. over 25 years ago, my wife helena and i started our business down at fisherman's wharf. since then the real estate managers have worked with us along the way, being very
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accommodating and instrumental in making the port's resources accessible to businesses. the first port member that really opened the door for us early in our careers was james herman. he had the vision to know that [speaker not understood] was in transition and with it would come new types of businesses like ours. i wanted to take this opportunity to thank the port and acknowledge the significance of its role in the evolution and growth of our business that would not have been achieved without the port's support. in more recent years, [speaker not understood] rip and j have been extremely supportive and helpful during those adjustment periods providing us with storage space near our operations. without the a sits tans ~ assistance of the port and its businessman jerk, it's clear our business would not have
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reached the success it has today. because of the port's consistent support, our company has grown to over 100 employees on the waterfront earning livable san francisco wages. as we have continued expanding over the years, the percentage rate [speaker not understood] occurred has also increased. we are sure it has been well received by the port as well. it has always been a [speaker not understood] to work with the port and we hope to continue this prosperous relationship into the future. >> thank you. is there any other public comment? thank you very much. my name is scott [speaker not understood]. i'm general manager of [speaker not understood] companies, we're a relatively new team to the port. we relocated from the port of oakland. we're a small business and the port real estate staff was very accommodating and they really assisted us in our move in. we went through the environmental procedures and all the regulatory compliance
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and the environmental staff was a big help. we understand that they have a tough job. there's a lot of requirements and a lot of regulatory people looking down and checking their work. so, it's a tough business, but you have to -- we have to comply in order to make sure we comply. it was kind of stringent, but we understand that that's the requirement and they made it very accommodating so i'd just like to thank the port and your staff for their efforts. >> thank you. welcome to the port of san francisco. is there any other public comment? come on up. hi, good evening. i'm paul [speaker not understood] with bill group. we're a general contractor building a project across the street from crane park. and we moved in about six months ago and the process was pretty easy. i heard it was difficult to get a lease, but it really wasn't.
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took about 30 days and got some good land, and it helped us build our project. so, yeah, we had a really good nice easy time. thank you. >> thank you. [laughter] is there any other public comment? commissioners, questions? >> thank you for your presentation. it's sometimes a little like secret sauce. we don't know what comes in when we get all the presentations. we see the 557 leases that we have and they run the gamut from the giants stadium to mom and pop shops. so, i thank you and your staff for managing what is quite a portfolio i think in the private sector. i know we have significantly greater number of people managing all of that, so, thank you for your presentation and for clarifying more of the whole process here. >> thank you, susan. >> i'm sorry.
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i know i speak for my colleagues and i know certainly [speaker not understood]. to the extent we can be helpful in any way, we certainly want to put ourselves out there and let you know we'd like to help. >> thank you, susan and all of your staff for all that you do for our wonderful waterfront. >> item 13 a, informational presentation by one san francisco waterfront partners 3llc, and [speaker not understood] llc, joint venture partnership consisting of tmg partners and premiere structures, the respondents request for proposal for the pier 38 bulkhead renotification project located at de lactiontionv i street and embarcadaro. ~ >> before we start can we take a five-minute break so everyone can get ready for this wonderful presentation? [recess]
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>> okay, we are ready to reconvene. we are ready to reconvene. okay, john? >> are we ready to go? >> we're ready to go. >> okay, good. john doe, planning development. good evening. this is pier 38 second presentation. just as i'll be very brief. just wanted to remind you the port issued a request for proposals for pier 38 late last year and the respondent for this rfp was asked to submit a short-term implementation strategy of the pier 38 bulkhead building and demonstrate its qualifications to undertake developing a long height and bulk term project for the remaining part of the pier. as you know, we've got -- we received two responses to the rfp.
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both are highly qualified. san francisco waterfront partners and tmg partners responded to the rfp to rehabilitate and retenant the pier 38 bulkhead structure. again, on june 11, both developers presented their qualifications and plans for the phase 1 bulkhead rehabilitation to help the commission and staff to further assess their proposals, port staff has requested each of the development teams ~ to further describe their vision for phase 1 rehabilitation and retenanting. accordingly, we have asked each developer team to address specific questions in their presentations. for phase 1, we have asked them to address project timing, incorporation of local hire, and local business enterprises into their project.
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and the price and term of their phase 1 project. in addition, the development teams have been asked to describe their overall vision of the redevelopment of the entire pier or phase ii. with regard specifically to development phasing and regulatory feasibility ~. so, as part of that we asked soon after completion of phase 1 would a phase ii begin. ~ how soon after we asked them how phase ii might affect their project economics. and then finally, we asked them to demonstrate how phase i might enhance phase ii. and, so, with that, last time san francisco waterfront partners was first and tmg was second so we're flipping it now. so, tmg will be first with michael culverubios is all set up. and last, about approximately 20 minutes or so for each group. the next steps is we hope to
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return to the port commission in september with a staff recommendation of the best qualified developer for the pier 1 project -- pier 38 project. we did pier 1 already. [laughter] >> okay, thank you. >> good afternoon. hi, i'm michael [speaker not understood] chairman and ceo of tmg partners and i'm here today representing our group, commissioners, and executive director and staff. what i want to do in the brief introduction is give a brief overview and we'll answer the questions in the time allotted. you have a description -- as soon as i click this. -- of our team members. all of them have had extensive experience dealing with the port and doing projects on the port. our partners at premiere structures you know well along with our architects, our
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structural guys, and construction and attorneys. the purpose of this conversation is to give you an overview of those two possibilities doing a phase 1 and then doing a phase ii on the bulkhead and the pier. they are tied together physically and we think they make a lot of sense together. i want to give you just a macro overview of what we think the tmg team provides, and then matt field and amy will walk you through the specific questions. it was our intent to make sure we met your vision, both from a public standpoint of use and from a financial return on your investment. we wanted to make sure that the experience we provided combined all the relationships that exist today in the south beach community. other companies, the public, the tourism and all of that. our track record at tmg is now
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we're going to be celebrating our 30th anniversary next year. we have done over 20 separate developments in the city of san francisco alone during those 30 years, and we've done over $3 billion worth of transactions. so, we, as we mentioned to you last time as an entity have not built specifically on the port, but our team and our experience in the city we think makes us highly qualified to do that. so, as i said, we're going to try to answer your questions and matt is going to start it off with the first part. >> thank you. commissioners, it's great to be here. we really do see this as a unique opportunity to build on the transformation of what's happened along the waterfront. as a kid who grew up knowing the embarcadaro as a freeway, to see the embarcadaro now known as the waterfront and what's happened, we really see this project as the culmination of a lot of things coming together in this part of the waterfront.
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i'll start with the phase 1 implementation of the short-term strategy. we looked at four main tenants in approaching this. first is we're looking to not trigger a seismic upgrade. it's a very significant undertaking if we breach the occupancy thresholds here. so, it was one of the things that drove us in terms of selecting uses that we could put into the structure, particularly public assembly uses like restaurants trigger higher occupancy. so, we were driving towards a threshold -- there's 6 34 occupants potentially allowed in here based on the prior use ~. we are at 6 30, so, i think we're about as close as we're comfortable getting without triggering. we wanted to have active public uses. we looked at financial feasibility as a big tenant of what we were doing, knowing that we were trying to not invest huge amounts of money to do something very quickly. and you'll see we're looking for the fastest activation. we saw that as one of the
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primary requests in the rfp. initially it was structured to be fairly short term and quick. so, that's how we approached this. in terms of trust related uses, we got retail, dining, and i think as you saw, food trucks that we're proposing to do on the front of the bulkhead building. if you haven't been to street food, which is over on 11th and division, i highly recommend you go see what's happening over there. we plan on tiering off of that. the people, the activation, the -- it really does capture everything that's happening in san francisco right now with creativity and very light touch. we see a real opportunity here. coming back out onto the north apron, redoing the north apron, fronting into the battle street park, and getting public access back into the building. the at the same time we look at the shell of the building and
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ironically it's sort of what we would deconstruct buildings to do in smarttion right now. you can look at it as being in disrepier. we look at it as being an opportunity. ~ south of market we're doing tech in the south of market and frankly all over the bay area. this is exactly the kind of space that we would start with -- try to end with almost so we think light touch implementation here. so, the ground floor ends up being a mix of uses. public access onto the north apron. restaurant on the front, and tech office on the balance of the bulkhead. and then the second floor would encompass more of that same tech office space. those big clear stand wood beams is exactly what we're doing. we're redoing the old hands building, brewery south of market. we had a celebrity chef coming n. we recently signed a lease with thomas mcnaughton, central flower and water to be in the
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building. you see those sorts of opportunities here on a short-term basis. they're really down scaling their concept to come into the building. we did something special with them to try not to put a ton of money in and do something quicker served. we see the same opportunities in this structure. as i was alluding to, we're really gearing this to fast implementation. we saw the request to turn the space around and get it active again as quickly as possible. we think the negotiateses and approvals based on what we're doing can be accomplished at nine months at the outside, maybe five months on the inside. we think we've got about seven months of design and permitting to go through. and because we're not doing major infrastructure improvements here we think we can get this going in four months. that gets us in about 18 months from the time we start this process. we think that's about as fast as we can go, but really achievable schedule to get the bulkhead back in service. lease we're proposing is 25 years. we are still making fairly significant improvements here.
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spending about $6 million. we're proposing receiptction to the port of about $25,000 a month. it's $300,000 a year. it does escalate, 5% every five years. we are looking for credits against the rent for about qualifying improvements up to 55% of the rent. the port will receive a participation if we were to sell this to a nonaffiliated entity, if we transteder to another entity which we wouldn't consider selling. if the port participates in our profit from selling it, so, it's a short-term quick turn around of the bulkhead building to get it active and we think compelling economic -- compelling economics given the investment into the space. before rehab, as you probably know, is a major undertaking of piers in pretty serious disrepair. we see this as a great, great
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opportunity to return the project to being a public asset. this is a great pier. it lacks aprons now that are accessible. being able to get back out on this part of the waterfront is going to be really spectacular. it will require a full-size mike upgrade as you probably know. ~ full seismic the shed undertaking, the pier itself being stabilized, it will be a complete historic renovation complying with the secretary of the interior standards. as we alluded to last time we were here, we've done a number of these projects, complying with the secretary standards including 1 market street directly across from you here. we see a great opportunity in building on the fabric that's already there. those steel beams, the building has great bones and we really see a fantastic opportunity to build on what's there. and then, of course, building on the public trust and maritime uses that can be supported by office development. so, how do we see that going
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is, again, retail and dining in the front. our scheme really here is to make improvements to the front in our phase 1 that we can mostly reuse in phase ii and not disrupt. so, our temporary uses in the front when we start construction in the rear, we don't have long-term leases that might be impacted by the heavy construction that we see occurring in the rear. we see the ark shes and heavy construction as a real challenge we'd like to avoid disrupting if we can. again, maritime on the dock, the floating oblige on the north and the new dock on the south that would be implemented as part of this program. ~ dock decking and water taxis, floating facilities, we see this part of the waterfront is under radical transformation and providing additional access we think would be critical for not only all project, but for other projects that are occurring along this part of the waterfront.
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restoring the apron here, if you walk out in this building and you look out and you see whattion' possible here, we see a real opportunity to provide an apron that wraps all the way around the building. two pass throughs, one at the front of the building and a second pass through about two-thirds of the way down the pier to provide public access in a number of different places. we think this will be really a unique asset. this is a very, very long pier when you compare it to other piers. so, there's an opportunity here that we think doesn't exist in a number of other projects that are maybe not quite of the same scale. we're providing office that would stretch for the latter, it's called three quarters of the pier. and we see that happening on first and second floor. we're looking at building mezzanines. so, the first floor is a mixed use component, public access, the docks, the retail at the
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front, and then office at the rear of the project. we think this is a really unique approach to putting the second floor in. if you've been in the building, it has a very tall clear story in the middle of the building. so, rather than pulling the mezzanines out to the glass line, we're helping to pull them into the middle of the building and build atriums between those mezzanines so we take advantage of the tallest part. and we don't push out against the glass line. we're going to enhance the transparency of the exterior of the building by not putting a floor right up against the glass. as you know, this is about what the building looks like today. our vision for transformation does something along the lines of this, activating that north apron again, and picking up on the existing facade and improvements which we really think, if they're polished, the basic improvements are great. again, looking at the pier, this has more dock doors than other piers when you look at t.
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that are in many cases there wasn't a lot of natural light that was possible to get into some of these spaces. here we think the transformation can be using the existing openings in filling those with glass and allowing access back out to the north apron and getting the dock improved. this is a view looking back from the grand street wharf which we think this is really nicely with. here's that interior clear story i was talking about in the iron work. we think this is one of the great features. you can see the rollup doors there. you can imagine transforming this to something that looks more like that on the inside, picking up off those existing improvements and getting light back into the middle of this. we think there's a great opportunity and great demand for this kind of space in the city. we've been very, very successful with tenants looking for this type of creative space, including this. i think we alluded to last time, macy's, riverbed, and we've done -- any number of
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large transas with tenants that would fit really neatly into this space. the process obviously has a number of steps and amy who is our partner thalmannage that process part of this will talk to that ~. really, really excited about this opportunity. >> thank you. delighted to be here again, commissioners. in this part of the presentation what we'll try to do is address some of the specific questions that the staff asked us to talk about as part of this presentation to you. in terms of regulatory approvals, as you well know, there's a lot of complexity when you do anything on the waterfront, especially when you do anything that's a major project such as we're talking about here. when we designed our program of uses as [speaker not understood] has eloquently gone through, to make sure it is something that is feasibly approvable within the current framework of the regulation of the waterfront. the local approvals, of course, require the port and the board
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of supervisors, pursuant to a c-e-q-a clearance process, for the short term that might well be a categorical exemption. for the phase ii project we're pretty sure that would be a full e-i-r. there is an existing bcdc permit that is held by both the port and the leaseholder for this -- for the pier. that would need to be amended or possibly for the long-term project a new permit would be needed. we believe that our land use plan and types of use in particular the maximum feasible public access is something that bcdc wrote in place and this is something that can be permitted with the combination of uses. and perhaps most importantly we've been very conscious of making sure that we are proposing a mix of uses the right balance that will be consistent with the public trust. the historic rehabilitation of the building to secretary standards is itself a trust use combined with the


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